How does NBFCs help in SMEs growth?

 

Finance company in delhi ncr

Are you looking for a trustworthy loan provider who can take care of your current finances of your enterprise and keep your secured loans intact; at the same time cater to your immediate need of availing a service, buying a land, property or take secured loan?  

What is an NBFC?

Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances and helps in the acquisition of shares, stocks, bonds, debentures, securities issued by Government or local authority or other marketable securities. Non-Banking Financial Company does not receive cash deposits from clients, nor does it provide some other services common to banks, such as checking accounts.

What is the difference between an NBFC and bank?

There is a difference between an NBFC and a bank. An NBFC lends and make investments, but it cannot accept demand deposits unlike a bank, nor does it form part of the payment and settlement system. It cannot issue cheques drawn on itself or deposit insurance.

Different categories of NBFCs registered with RBI are categorised on the basis of the type of liabilities into Deposit, by its size into systemically important and other non-deposit holding companies and by the kind of activity they conduct.

NBC providing loan to SMEs

Small and medium-sized enterprises (SMEs) play a crucial role in the economic development of a country. Their contributions are significant in terms of employment generation, GDP growth, innovation, and fostering entrepreneurship.

Why does an SME need an NBFC?

If you own a small or medium organisation, then connecting to a Non-Banking Financial Company (NBFC) can be of utmost importance for your business. A careful research is needed while approaching an NBFC. It's important for small or medium sized organisations (SMEs) to carefully evaluate the terms, interest rates, fees, and reputation of an NBFC in case they approach one. Conducting thorough research will help SMEs choose a reliable and trustworthy NBFC partner. It is important especially for the following mentioned reasons-

 

1. Access to financing: NBFCs specialise in providing financial services and products to businesses and offer various types of loans, such as working capital loans, equipment financing, trade finance, and invoice discounting best availed from a nearby finance company in Delhi.
2. Flexibility in secured loan approval: NBFCs often have more flexible lending criteria compared to traditional banks where they consider factors as credit scores, business performance, cash flow or collateral, that enables SMEs with weaker financials and helps to secure financing.
3. Quick processing and disbursement: NBFCs typically have loan approval processes and faster disbursement timelines compared to banks which can  be a crucial process for SMEs that require immediate funds to seize business opportunities or fund expansion.
4. Customised financial solutions: SMEs often have unique financing requirements that may not fit the standard offerings of traditional banks, hence an NBFC can help sustain their needs better.
5. Sector-specific expertise: Some NBFCs specialise in serving particular sectors or industries like an NBFC focuses more on healthcare, another on agriculture or manufacturing or technology. An SME can choose according to their needs.
6. Support for growth and expansion: When an SME thrives to grow they often require additional capital for extra support where an NBFC comes into play and can offer financing options such as term loans, equipment financing, project funding or acquisition funding.
7. Additional services: Apart from lending, NBFCs provide services such as trade finance, working capital management, cash flow forecasting, foreign exchange services, risk management and advisory services. These services are best availed through a renowned and trustworthy finance company in delhi.